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Elcom - Revenue Sharing Agreement
Exhibit 10.2
DATED AUGUST 12, 2005
(1) Elcom Systems Limited
(2) IMPAQ Business Solutions Limited
(3) PA Consulting Services Limited
(4) @UK plc
(5) PA Shared Services Limited
REVENUE SHARING AGREEMENT
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Exhibit 10.2
CONTENTS
CLAUSE PAGE 1. INTERPRETATION....................................................... 4 2. COMMENCEMENT AND TERM................................................ 8 3. OBLIGATION OF PASSL.................................................. 9 4. OBLIGATIONS OF THE CONSORTIUM MEMBERS................................ 9 5. THE STEERING COMMITTEE AND AUTHORISED REPRSENTATIVES................. 10 6. COSTS RECOVERABLE THROUGH AGREED MECHANISM........................... 11 7. PSB SET UP COSTS..................................................... 12 8. VALUE ADDED SERVICES................................................. 12 9. SET OFF.............................................................. 13 10. INTEREST ON LATE PAYMENT............................................. 13 11. NO PARTNERSHIP AGENCY OR EMPLOYMENT.................................. 13 12. BANK ACCOUNT......................................................... 14 13. ACCOUNTS AND FINAL RECONCILIATION.................................... 14 14. LIABILITY OF THE PARTIES............................................. 16 15. EXPELLED PARTIES..................................................... 18 16. CONFIDENTIALITY...................................................... 19 17. TAXATION............................................................. 19 18. DISPUTES............................................................. 20 19. GENERAL.............................................................. 20 20. NOTICES.............................................................. 21 21. AMENDMENTS........................................................... 23 22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999......................... 24 23. GOVERNING LAW AND JURISDICTION....................................... 24
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Exhibit 10.2
THIS AGREEMENT is made the 12th day of August 2005
BETWEEN:
1 Elcom Systems Limited (registered number 2838561) whose registered
office is at Forest House , 3-5 Horndean Road, Bracknell,RG12 0XQ;
("ELCOM")
2 IMPAQ Business Solutions Limited (registered number 03800294) whose
registered office is at Lantern House, Walnut Tree Close, Guildford,
Surrey, GU1 4TX; ("IMPAQ")
3 PA Consulting Services Limited (registered number 00414220) whose
registered office is at 123 Buckingham Palace Road, London SW1W 9SR;
("PACS") also the ("GUARANTOr").
4 @UK plc (registered number 03732253) Unit 5 Jupiter House Calleva
Park Aldermaston Reading RG7 8NN;("@UKPLC")
5 PA Shared Services Limited (registered number 05234104) whose
registered office is at 123 Buckingham Palace Road, London SW1W
9SR;("PASSL")
BACKGROUND:
(A) PASSL has signed or is due to sign a Framework Agreement with OGC which
obliges PASSL to provide and maintain an e-procurement system called the
Zanzibar System;
(B) PASSL has requested the assistance of various sub-contractors (the other
parties to this Agreement) to assist in the provision of the Zanzibar
System and to ensure compliance with their respective duties and
obligations under the Framework Agreement and other associated agreements;
(C) In consideration of PASSL signing the Framework Agreement and the
Consortium agreeing to provide certain services to PASSL, PASSL agrees,
subject to the terms of the Agreement, to reimburse each Consortium Member
certain defined set up costs and value added costs as incurred, and to
share Annual Subscriptions in agreed proportions; and
(D) The Guarantor has agreed to provide a performance guarantee in favour of
OGC and PSB's for PASSL's obligations under the Framework Agreement and
its associated agreements.
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OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 In this Agreement the following expressions shall have the following
meanings unless inconsistent with the context:
"ACCOUNTING PERIOD" Means the most recent quarter within a
financial year at any given time. For
the avoidance of doubt, the relevant
quarter end dates are the last Friday
in March, June, September and on the
31st December and the first Accounting
Period shall run from the Effective
Date to the first quarter end date to
occur following the Effective Date;
"ADDITIONAL RISK PREMIUM" Has the meaning set out in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
"AFFILIATE" Means in relation to a company, any
holding company, subsidiary,
subsidiary undertaking or fellow
subsidiary or subsidiary undertaking
or any other subsidiaries or
subsidiary undertakings of any such
holding company. For the purposes of
this definition the words "subsidiary"
and "holding company" shall have the
same meaning as in the Companies Act
1985;
"AGREED MECHANISM" Has the meaning set out in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
"AGREED PROPORTION" Has the meaning set out in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
"BUSINESS DAY" Means any day other than a Saturday or
Sunday or a public or bank holiday in
England;
"CENTRAL MANAGEMENT COSTS" Has the meaning set out in Schedule
OR "CMC" ERROR! REFERENCE SOURCE NOT FOUND.;
"COLLECTION ACCOUNT" Means the current or deposit accounts
to be
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opened by PASSL pursuant to
clause 12.1;
"CONSORTIUM MEMBER(s)" Means the individual parties that make
up the Consortium and such Consortium
Members are PACS, @UKplc, ELCOM and
IMPAQ;
"CONSORTIUM" Means those parties that on or around
the date of this Agreement have
entered into Sub-Framework Agreements
of even date for the purpose of
supplying and delivering the Zanzibar
System and associated services via
PASSL;
"CORE SET-UP COSTS" OR "CSUC" Has the meaning set out in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
"COSTS" Means the Core Set Up Costs, PSB
Hosting Costs, and Central Management
Costs;
"DEVELOPMENT POOL" Means the development pool specified
in section 5 of Schedule 4 of the
Framework Agreement;
"DIRECT COSTS" OR "DC" Means the direct costs as set out in
Schedule ERROR! REFERENCE SOURCE NOT
FOUND.;
"DISPUTE RESOLUTION PROCEDURE" Means the procedure contained in
Schedule ERROR! REFERENCE SOURCE NOT
FOUND.;
"EFFECTIVE DATE" Means the date of the last signature
to this Agreement;
"FRAMEWORK AGREEMENT" Means the Framework Agreement entered
into between PASSL and OGC of even
date;
"INTEREST INCOME" Means interest received or credited to
the Collection Account;
"LOAN" Means an intra-group loan facility
made by PACS to PASSL;
"OGC CHARGE" 2.5% of any amount invoiced by PASSL
to a PSB under any Service Provision
Agreements in any given Accounting
Period;
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"OGC" Means the counterparty to the
Framework Agreement, namely the Lords
Commissioners of Her Majesty's
Treasury as represented by
OGCbuying.solutions and includes its
successors or assigns;
"OTHER INCOME" OR "OE" Has the meaning set out in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
"PERFORMANCE GUARANTEE" Means the performance guarantee to be
provided by PACS in favour of OGC
guaranteeing the obligations of PASSL
under the Framework Agreement and
Service Provisions Agreements;
"PERFORMANCE INCENTIVES" Means the amounts payable to PSB's in
respect of service level breaches
pursuant to the Service Provision
Agreements;
"PSB HOSTING COSTS" OR "PSBHC" Has the meaning set out in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
"PSB SET-UP COSTS" Means the fees chargeable by a
Consortium Member for the set - up and
initial configuration of the Zanzibar
System for a PSB;
"PSB" Means any public sector body, buying
organisation or other body that has a
right to use the Zanzibar System with
whom PASSL enters into a Service
Provision Agreement;
"RELEVANT FUNDS" Has the meaning set out in Clause 7.2;
"RISK PREMIUM" Has the meaning set out in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
"SERVICE PROVISION AGREEMENT" Has the same meaning as is defined in
the Framework Agreement;
"SERVICES" Means the services to be provided to
OGC or a
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PSB or supplier under the Framework
Agreement, Service Provision Agreement
or Supplier Agreement as the case may
be;
"STEERING COMMITTEE" Means the committee formed pursuant to
Clause 5;
"SUB-FRAMEWORK AGREEMENT" Means the framework agreements entered
into individually between each member
of the Consortium and PASSL of even
date which enable PASSL to provide the
Services;
"SUBSCRIPTION REVENUE" OR "SR" Means the revenue received by PASSL
from a PSB for use of the Zanzibar
System derived from the Annual
Subscription Charges as defined in the
Framework Agreement;
"SUPPLIERS" Has the same meaning as it is defined
in the Framework Agreement;
"SUPPLIER AGREEMENT" Has the same meaning as it is defined
in the Framework Agreement;
"VALUE ADDED RELEVANT FUNDS" Has the meaning set out in Clause 8.2;
"VALUE ADDED SERVICE" Has the meaning specified in Schedule
4 of the Framework Agreement;
"VOLUME DISCOUNT" Has the meaning specified in Schedule
4 of the Framework Agreement;
"WARRANTY RETENTION" Means a percentage of the revenue from
the Services that is received by PASSL
which is retained to cover potential
warranty or indemnity claims more
particularly described in Schedule
ERROR! REFERENCE SOURCE NOT FOUND.;
and
"ZANZIBAR SYSTEM" Has the same meaning as it is defined
in the
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Framework Agreement.
1.2 Any reference to a statute or statutory provision shall be construed as a
reference to the same as from time to time amended, modified, extended,
re-enacted, consolidated, or replaced.
1.3 The headings to the clauses and Schedules of this Agreement are for
convenience only and shall not affect its construction or interpretation.
1.4 In this Agreement the masculine includes the feminine and the neuter, and
the singular includes the plural and vice versa as the context shall admit
or require.
1.5 References to "parties" are references to the parties to this Agreement as
may be varied from time to time, and the expression "person" means any
individual, firm, body corporate, unincorporated association, partnership,
government, state or agency of a state or joint venture.
1.6 Any obligations on a party not to do or omit to do anything includes an
obligation not to allow that thing to be done or omitted.
1.7 References to "consent" or words to similar effect mean a consent given in
advance in writing signed by or on behalf of the party whose consent is to
be given.
1.8 References to "goods" include any plant, tools or equipment.
2. COMMENCEMENT AND TERM
2.1 This Agreement shall commence on the Effective Date and shall expire when
the Framework Agreement and Service Provision Agreements terminate, expire
or are novated to OGC (or any third party other than an Affiliate of
PASSL) whichever is the later and when all Subscription Revenue, Risk
Premium and Additional Risk Premium and any interest thereon have been
distributed that arise from the Framework Agreement and its associated
documents.
2.2 The provisions of Clauses 11, 13, 14, 14.9, 16, 18 19, 20, 21, 22 and 23
shall continue to bind the parties following expiration of this Agreement
or expulsion of any party pursuant to Clause 14.9 or otherwise and all
other clauses in this Agreement which expressly or impliedly have effect
after termination shall continue to be enforceable notwithstanding
termination.
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3. OBLIGATION OF PASSL
3.1 PASSL shall at all times comply with the Framework Agreement, the
Sub-Framework Agreements and the Service Provision Agreements.
3.2 PASSL has agreed to be the counterparty to all agreements with the OGC,
PSB's and Suppliers in reliance upon the commitments of Consortium Members
set out in the Sub-Framework Agreements.
3.3 In consideration of the Consortium Members providing the Services in
accordance with the Sub-Framework Agreements, PASSL shall:
3.3.1 Pay each of the Consortium Members the PSB Set Up Costs and costs
for the Value Added Services subject to the terms of this Agreement;
and
3.3.2 Share a proportion (if any is applicable under the Agreed Mechanism)
of the Subscription Revenue, Risk Premium and Additional Risk
Premium and any Other Income in accordance with the terms of this
Agreement.
3.4 In consideration of PACS providing the Performance Guarantee, PASSL shall
indemnify and hold harmless PACS against all claims under the Performance
Guarantee.
4. OBLIGATIONS OF THE CONSORTIUM MEMBERS
4.1 The Consortium Members shall at all times comply with their Sub-Framework
Agreement, and shall co-operate with PASSL, under the terms of the
Sub-Framework Agreement, to enable PASSL to comply with its obligations
under Clause 3.1 above.
4.2 PACS agrees to provide a Loan, on demand of PASSL, to PASSL. PACS will
charge PASSL interest on the Loan calculated monthly and at an interest
rate set monthly. Interest shall accrue until it is repayable under
Clauses 4.4 and 4.5. The Loan will be provided on similar terms to other
loans provided within the PA Group of companies or such other rate as the
Inland Revenue determine should properly be chargeable under schedule 28AA
Taxes Act 1988. At the date of this Agreement those terms provide for
interest to be charged at the LIBOR rate rounded up to the nearest 0.25%
plus 1%. At the start of each calendar month PACS will advise PASSL of the
interest rate for that
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month. Advances made within the month will accrue interest at the market
rate applicable for the remaining part of that month
4.3 PASSL agrees that the aggregate of all advances made by PACS under the
Loan shall not exceed (pound)300,000 (three hundred thousand pounds)
(excluding interest) except in the absolute discretion of PACS.
4.4 Subject to clause 4.5, each advance of the Loan will be repayable and all
interest accrued but unpaid will be payable on the 31st of December in the
year that the advance was made.
4.5 Advances made during and up to the end of the first calendar year of this
Agreement will be repayable on the 31st of December in the following year.
The interest accrued on advances made up to 31st of December in the first
calendar year of this Agreement will be payable by PASSL on the 31st
December 2005.
4.6 PASSL shall use Subscription Revenue to pay the accrued interest and repay
the Loan advances when due.
4.7 If PASSL has insufficient Subscription Revenue from which to pay the
accrued interest and/or Loan advances when due, then each Consortium
Member agrees to meet the Loan obligations of PASSL to the extent of their
Agreed Proportion as at the date the Loan advances and any accrued
interest are due. In order to ensure that all Consortium Members pay the
costs of the loan in their cumulative Agreed Proportion over the life of
the Agreement, any amounts repaid in prior years will be recalculated at
the end of each subsequent year based on the latest Agreed Proportion for
each Consortium Member and any changes will be reflected in the following
settlement to that Consortium Member from Subscription Revenue. In this
event, PASSL will render an invoice to each Consortium Member which will
be payable on within 10 Business Days of receipt of the invoice.
4.8 PASSL shall inform the Steering Committee of the amount of the Loan
outstanding on a monthly basis.
5. THE STEERING COMMITTEE AND AUTHORISED REPRSENTATIVES
5.1 The parties shall form a Steering Committee for the purpose of
co-ordinating delivery of the Services. Each party shall appoint one
representative to the Steering Committee.
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5.2 Individuals who are members of the Steering Committee may be replaced at
the discretion of the party appointing them.
5.3 The parties shall forward details of any request for Services to the
Steering Committee who shall make a decision as to which Consortium Member
should undertake or offer to undertake the service in question. In the
absence of agreement the matter shall be decided by PASSL taking into
account any representations made by the Steering Committee.
5.4 Each Consortium Member shall appoint an authorised representative who may
approve any aggregation discounts as set out in Schedule 4 of the
Framework Agreement. A Consortium Member may change the authorised
representative on written notice to all parties to this Agreement.
5.5 Where any matter is stated in this Agreement to be decided by the Steering
Committee then the Steering Committee's decision must be a unanimous
decision unless expressly stated otherwise.
6. COSTS RECOVERABLE THROUGH AGREED MECHANISM
6.1 Each member of the Consortium will bear its own Core Set Up Costs, PSB
Hosting Costs and Central Management Costs and will not invoice PASSL for
any of these costs.
6.2 At the date of signature of this Agreement each Consortium Member will
provide accurate details of all Costs incurred to the date of signature
and each month thereafter will provide accurate details of all Costs
incurred in the previous calendar month not less than 10 days after the
end of a calendar Month.
6.3 Each Consortium Member can only recover their Costs through the Agreed
Mechanism.
6.4 If a component has been substituted in the Zanzibar System because it was
supplied by a Consortium Member other than in accordance with the
Sub-Framework Agreement and the overriding requirements set out in the
Framework Agreement then the Costs of that Consortium Member will be
reduced pro rata by the Steering Committee and in the absence of unanimous
agreement as to the reduction, by the directors of PASSL considering any
representations of the Steering Committee. The pro rata reduction will
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be calculated by taking the cost of the component substituted, dividing it
by the expected length that that component was expected to support the
Zanzibar System (not greater than five years) and multiplying it by the
number of years in which that cost for the component has been included in
the calculation for the Agreed Proportion for that Consortium Member to
the date of substituted.
6.5 If the members of the Steering Committee unanimously agree then a
Consortium Member may adjust its Core Set-Up Costs and/or Central
Management Costs to include other costs, such agreement of the Steering
Committee shall be recorded in writing and state expressly the amounts and
periods to which such agreement relates.
7. PSB SET UP COSTS
7.1 PASSL will invoice the PSB's for the PSB Set Up Costs as soon as
practicable in accordance with the relevant Service Provision Agreement
provided it has all relevant information from the relevant Consortium
Member.
7.2 PSB Set Up Costs incurred by a member of the Consortium can be invoiced to
PASSL at anytime after the invoice to the relevant PSB has been raised
however these invoices will only be paid by PASSL when payment for the PSB
Set Up Costs is received by PASSL from the relevant PSB ("Relevant
Funds"). If PASSL is required to gross up any payments in accordance with
Clause 17.3 the fees chargeable by a member of the Consortium may only be
invoiced to the extent that Relevant Funds are available. Payment in
respect of PSB Set Up Costs will be paid by PASSL within 5 Business Days
after receipt of the Relevant Funds or the invoice whichever is the later.
PASSL shall notify the affected Consortium Member(s) if it has notice that
payment in respect of an invoice referred to in this clause is being
withheld by the relevant PSB.
8. VALUE ADDED SERVICES
8.1 PASSL will invoice the PSB's or Suppliers for any Value Added Services as
soon as practicable in accordance with the underlying contract provided it
has all relevant information from the relevant Consortium Member.
8.2 The fees chargeable by a member of the Consortium for providing Value
Added Services can be invoiced to PASSL at any time after the invoice to
the relevant PSB has been raised however these invoices will only be paid
by PASSL when the payment for
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the Value Added Services specified in Clause 8.1 is received by PASSL
("Value Added Relevant Funds"). If PASSL is required to gross up any
payments in accordance with Clause 17.3 the fees chargeable by a member of
the Consortium may only be invoiced to the extent that Value Added
Relevant Funds are available. Payment of any invoice from the Consortium
Member in respect of the fees ...
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